According to Central Bank of Montenegro, the banking sector remained solvent and liquid. Total bank assets amounted to EUR 5.33 billion at the end of 2021, an increase of EUR 741.6 million or 16.2 percent over the previous year. Loans make up the dominate share of bank balance sheets, amounting to EUR 3.36 billion at the end of 2021, a 6.4 percent increase over 2020. Non-performing loans accounted for 6.2 percent of the total. In 2021, lending activity grew by 13.9 percent over 2020, while the interest rate dropped to 5.66 percent due to increased competition.
Montenegro is one of a few countries that does not belong to the Euro zone but uses the Euro as its official currency (without any formal agreement). Since its authority is limited in monetary policies, the Central Bank, in its role as the state’s fiscal agent, has focused on control of the banking system and maintenance of the payment system. The Central Bank also regulates the process for establishing a bank. A bank can be founded as a joint-stock company and acquire the status of a legal entity by registering in the court register. An application for registration in the court register must be submitted 60 days from when the bank is first licensed.
Foreign exchange policies
The Foreign Investment Law guarantees the right to transfer and repatriate profits in Montenegro. Montenegro uses the Euro as its domestic currency. There are no other limitations placed on the transfer of foreign currency.
There are no difficulties in the free transfer of funds exercised on the basis of profit, repayment of resources, or residual assets. The Central Bank of Montenegro publishes statistics on remittances as a proportion of GDP, with the latest data available indicating that in 2020 remittances accounted for approximately 12.3 percent of GDP.